Did you know that 60 percent of businesses that fail are profitable when they go out of business? They just don’t have the cash flow to cover their expenses, and it forces them into closure.
Part of the problem is that once your cash flow issues are apparent and affecting your business operations, it can be really difficult to secure a loan to float you through. As Inc.com pointed out in its recent interview with CEO of Palo Alto Software, Sabrina Parsons:
The old adage about how banks only lend to those who don’t need their money has some truth to it. More to the point, if you wait till you can’t make payroll it’ll be difficult for the bank to help you since they generally can’t lend to companies at risk of going bankrupt or ceasing operations.
If weak cash flow is a problem you’re facing, the whole article is worth a read. In it, Parsons details how to up your chances of being approved for a bank loan, which could make the difference between keeping your open sign lit and closing your business’s doors for good.